Rules are only applicable in a contest when opponents and officials are true to their roles, but when anarchy takes root the rule book goes out the window. And that’s where our economic world finds itself today. The economic rule book says that “uncertainty” pushes investors from traditional investments to the safe haven of precious metals, yet with months of failed domestic policy, impotent growth and inflation, and America and its allies both flocking to policies of domestic protectionism, precious metals can be found at absurdly low levels and investors can be seen riding an emaciated bull market to near daily new highs. But there is no legitimate rationale to believe this long in the tooth bull market can maintain itself, let alone continue to grow.
Practically every cent that American companies have had access to, whether begged, borrowed or stolen, has been spent on stock buyback plans, inflating stock prices, but leaving absolutely nothing for the growth and development of the companies. Fed interest rate increases are way behind where they should be at this point and the Fed will probably not implement another increase until December, which only serves to add insult to the existing injury. A deranged North Korean with his finger on the nuclear button has finally caused a moment of global reflection that may prevent the market from a positive gain today, but when is the leak in this global ether fog going to be found and capped?
The collapse that this market is heading for will make the 2008 market debacle look like a slow motion thrill ride, this collapse will be sudden, precipitous, and devastating for those not willing to prepare. I urge any intelligent investor to stop looking at precious metals as an investment, but rather a financial life raft. Today’s lower prices are just another reason not to wait to protect your financial legacy. Tomorrow’s job report may still post a gain, but will be substantially below the same month last year. Meanwhile, the Fed has announced its desire to reduce its bloated balance sheet, but says that it is sensitive to the implications on what they perceive as a possible asset bubble in equities and housing. Wow, thank you Captain Obvious.
Silver is severely undervalued and gold posted a stochastic reading at 4.04, a low never seen before and at a possible double bottom. RSI at 31.46 is the lowest reading so far this year. Regardless however, the stock market can continue up and precious metal prices can continue down, but what every investor needs to realize right now is that the entire universe of available physical precious metals can be bought up in nanoseconds and when the collapse begins today’s opportunity will immediately become ancient history.